Brussels wants answers from Madrid over Endesa

6th March 2006, Comments 0 comments

6 March 2006, BRUSSELS — The European Commission warned the Spanish government its attempts to block the German energy giant E.ON's bid for Spanish utility Endesa could be a breach of EU law.

6 March 2006

BRUSSELS — The European Commission warned the Spanish government its attempts to block the German energy giant E.ON's bid for Spanish utility Endesa could be a breach of EU law.

Brussels sent an official letter to Madrid over its recent move to strengthen the Spanish energy regulator and give it extra powers to block foreign bids for Spanish companies.

Last month, Madrid gave the regulator CNE extra powers to stop E.ON's EUR 29.1 billion bid for Endesa.

Oliver Drewes, spokesperson for EU internal market commission Charlie McCreevy, said: "We can confirm we sent a letter to Spain on Friday evening in relation to the recent events concerning E.ON's bid for Endesa and especially the response of the Spanish authorities to this approach which has given the commission cause for concern

"We understand that on 24 February this year, the Spanish government adopted a decree law by which the powers of the national energy commission have been strengthened.

He added: "In particular we understand that the decree law stipulates the new authorisation system for the acquisition of shares by companies engaged in regulated activities as well as by companies carrying out activities which are subject to special administrative controls or other activities referred to in that decree law."

"In our view, the new national provisions could create obstacles to the right of establishment of nationals of other member states as well as to the free movement of capital within the (European) community since they may hinder or render less attractive the exercise of those freedoms."

Drewes said the EC letter to Spain asked a number of specific and detailed questions.

Madrid has ten working days to reply.

[Copyright EFE with Expatica]

Subject: Spanish news

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